Fed Report says Austin business still strong and growing — but at a slower rate

austin-overtures-sightseeingFrom today’s Austin Business Journal:

In at least one key economic indicator, the stellar growth of Austin’s business scene is slowing down and has been for some time, according to data released by the Federal Reserve Bank of Dallas this month.

That indicator is the Business Cycle Index, a key metric followed by economists for its insight into broad economic trends at the national, state and local level. It looks most closely at changes in the local unemployment rate, nonagricultural employment, wages and retail sales. For the Austin area, the business-cycle index expanded at an adjusted rate of 7.1 percent in May. That’s far lower than the 10.7 percent business-cycle expansion seen in January 2015, the highest point of the index since the Austin region emerged from the Great Recession.

But a more troubling indicator is the fact that the business cycle index has dropped consistently since that point. At 7.1 percent, Austin is still above its average long-term growth rate of 6 percent. The last time Austin dipped below the long-term growth average was in 2007, as the Great Recession began to set in. By mid-2008, the slide had continued and Austin’s business-cycle index dropped into the negative — economic contraction — for more than a year. It wasn’t until late 2009 that Austin’s economy began to grow again, according to the index.

Other metrics from the same report show positive trends, but with some caveats. For instance, annualized job growth was 2.5 percent in May, well above the 0.4 percent job growth seen in Texas and the 0.3 percent job growth seen across the U.S. The largest share of that growth came in the trade, transportation and utilities industry, which makes up 17.5 percent of Austin’s employers. That industry grew by 6.5 percent in May. But manufacturing, which makes up 5.8 percent of Austin’s economy, saw employment shrink by 6.4 percent in May. Also of note: the leisure and hospitality industries saw employment shrink in Austin by 0.9 percent, a surprising contraction after that industry’s employment had been in expansion mode since January.

Meanwhile, year-over-year change in real wages paid increased 10.5 percent in Austin compared to 2.6 percent in Texas and 4.3 percent nationwide. Further, Austin’s unemployment rate continues to hover around 3 percent, compared to 4.4 percent in Texas and 4.7 percent in the U.S. Average hourly earnings in Austin rose to $26.55 per hour, more than a dollar above the national average and more than two dollars above the statewide average, which has been hurt by a sluggish oil and gas economy.

Additional information>>>

Massive surf park east of Austin hits legal snags over pool permit

surf park austinAn update from the Austin American-Statesman:

Travis County is on the verge of a court fight with a massive, unopened surf park over a disagreement about whether the park just east of Austin needs a swimming pool permit.

The Commissioners Court last week authorized lawyers to sue the operators of NLand Surf Park, saying the park is being built without conforming to county and state health and safety codes. The suit has not yet been filed.

“Such legal action is essential to protecting Travis County and its citizens,” County Judge Sarah Eckhardt said.

NLand Surf Park, which developers boast will be the first inland surfing facility of its kind in North America, is under construction near Texas 71, east of Austin-Bergstrom International Airport. Contractors are building a lagoon the size of nine football fields that will include artificial waves for 11 surfing areas, according to NLand’s website.

The project is the brainchild of Doug Coors, a member of Colorado’s famous brewing family. Its opening date is unclear.

Attorneys for NLand and Travis County have been negotiating for months over whether the lagoon counts as a public swimming pool and, thus, requires a permit. NLand believes it does not, arguing that the rainwater-fed lagoon is more similar to a lake.

The park’s attorney, Richard Suttle, said the American-Statesman’s call was the first he had heard of Tuesday’s vote and said he was “completely blindsided” that the county would file a lawsuit before the park opened.

“This is a one-of-a-kind in the world (facility), and we are still working the logistics out on water quality,” he said.

State law defines a swimming pool as any “artificial body of water, including a spa, maintained expressly for public recreational purposes.” It requires pools to administer chlorine to keep bacteria from exceeding safe limits and meet other sanitary requirements.

NLand will treat its water with chlorine and has a water quality monitoring system to make sure the water is safe and does not exceed state bacterial standards, Suttle said. But the lagoon is too large to comply with other requirements of a pool, such as refiltering water every six hours, he said.

At least two wakeboardparks exist within Travis County, and neither has a pool permit from the city of Austin, which handles all pool permits in the city and unincorporated areas of the county. Suttle said he tried to raise that point with county officials.

“Their explanation to me was: ‘Just because someone else is speeding down I-35 and we don’t give them a ticket doesn’t mean we shouldn’t give you a ticket,’ ” he said.

Though NLand’s Facebook page continues to insist it will be open in “early summer,” Suttle said the park is months, not weeks, away from opening. A wastewater treatment plant built specifically for the site is set to be online in a few weeks, and that will make it possible to start bringing personnel to the site, he said.

The facility’s website shows job openings for a director of facilities, cafe cook, beer brewer, surf shop clerk, guest ambassador, cashier, bartender and dishwasher, as well as several surf coaches.

Travis County Commissioner Margaret Gómez, whose precinct includes the park site, declined to say what caused the move to legal action now. She called NLand an interesting project.

“They still have a lot of things to complete, but if they get it together and it’s well-run, kids love that stuff,” she said.

Full story>>>

Find out where Austin’s economy is heading

RECA-VerticalAt the Economic Forecast Lunch during the RECA Exchange scheduled for August 9, Real Estate Center of Texas A&M Chief Economist Dr. James Gaines will give share his latest insight and analysis on the local, statewide and national economies and their impact on the commercial real estate industry.

RECA’s half day Exchange brings together hundreds of Austin’s commercial real estate professionals to network and learn about hot topic issues. The event is open to both members and non-members and tickets may be purchased on the RECA website.

Miller Salutes Austin Entrepreneurs

Ernst-and-Young-Entrepreneur-of-the-Year-LogoAs our founder was an entrepreneur and so many of our customers are hard working entrepreneurs, we would like to add our kudos to this year’s Austin winners of the Ernst & Young Entrepreneur of the Year Awards, announced last night:

• Emerging winner: Ally Davidson, co-founder and co-CEO of Camp Gladiator

• Technology Services winner: Christopher Hester, CEO, Kinnser Software

• Real Estate, Construction and Infrastructure winner: Greg Henry, founder, Aspen Heights

• Transformational winner: Mark Watson, president and CEO, Argo Group International Holdings

• Emerging winner: Amy Porter, founder and CEO, AffiniPay LLC

• Technology winners: Hank Seale, founder and chairman; and Matt Flake, president and CEO, Q2 Software

Full story in today’s Austin Business Journal>>>

Where do You Stand on Standing Desks?

Standing_desk_From the HellaWella blog:

We’re huge fans of standing desks. They help give your circulatory system a break from being sedentary for hours on end, and they may even help sharpen your focus. If you’re still on the fence, then check this out.

An innovative wearable technology for standing desks that creates a new way of interacting with your computer could reduce cyber-slacking and increase healthy movement.

Researchers at the University of Waterloo’s David R. Cheriton School of Computer Science are hoping to make computing a bit more fun and physically active all while helping computer users kick lazy habits by introducing a foot interaction method for computer users with a standing desk.

Professor Daniel Vogel presented Tap-Kick-Click: Foot Interaction for a Standing Desk at the Association for Computing Machinery’s Designing Interactive Systems 2016 in Brisbane, Australia this week.

The idea behind the research project, conducted with master’s student William Saunders, is that computer users at standing desks can increase their physical activity through indirect, discreet two-foot movements that include a combination of kicks, foot taps, jumps and standing postures that are tracked using a depth camera and instrumented shoes.

In addition to increasing physical activity while standing, these techniques use foot input as a cyber-slacking deterrent by requiring the user to stand in a mildly uncomfortable position, such as a lunge, while viewing social networking websites or other distracting content. When the user changes from that position, the distracting content locks again.

“People already use a standing desk to be healthier and more productive. Increasing physical activity by using your feet to enter commands is our main focus, but the anti-cyberslacking pose is something that really pushes the whole idea farther,” said Vogel. “Some people already install software to completely block sites like Facebook when they want to get work done. Our technique lets people use those sites, but since they need to stand in an uncomfortable pose while viewing them, they’re naturally encouraged to keep it brief.”

The researchers demonstrate the Tap-Kick-Click technique with a web browser, document reader and a code debugger, but the system can be paired with almost any desktop application. An on-screen guide helps the user remember and perform associated foot actions while taking a break from working with their hands.

“There’s plenty of research showing that using feet to type or move a cursor isn’t a very good idea. We demonstrate that with the right style of interaction, feet are a good fit for slower tasks with intermittent input. Things like scrolling a webpage while reading or interactive code debugging,” said Vogel. “We hope our system can make computing more physically active and maybe even a bit more fun.”

Additional information and video>>>

Inspiration from a Bad Cup of Coffee

TexasCoffeeGroup_250w
Pictured from left: Justin Espinosa: Miller IDS, Graphic Designer; Brent Armstrong: Texas Coffee Traders, Client Growth Specialist; Nik Sauer, Miller IDS, Production Manager (Metric Store); pictured at Texas Coffee Traders’ Airport Hilton location.

The genesis of Texas Coffee Traders was simple; R.C. Beall drank a good cup of coffee, then a very, very bad cup of coffee and wondered how they could be so different.

A Montana forestry ranger originally from Houston, R.C. bought an old roasting machine complete with five bags of green coffee beans he found in a barn and started experimenting. He decided this could be a business and started Montana Coffee Traders in 1981, eventually growing it into the sustainable business and community hub he had envisioned.

But Texas was calling him home, so he returned, reconnected with and married Beth and then together they founded Texas Coffee Traders in an old Austin warehouse on East 4th in 1994. They had the same goal of roasting and serving fresh, high quality Fair Trade coffee in a TxCoffeeTraders_In-StoreSignage_600wrelaxed, friendly neighborhood place, becoming an integral part of the Austin community and giving back to that community.

According to Beth Beall, it is that same sensibility and community involvement that first drew them to Miller IDS. In her words, “they get us”! Beth says they generally come to Miller with a vague concept and Miller takes that concept to a whole new level, realized in visual collateral such as banners, signage TxCoffeeTraders_600wand adhesives that underscore Texas Coffee Traders’ solid reputation and credibility, but allow their unique, self-described “quirkiness” to shine through.

We are big fans and hope to see you there! If you can’t make it by, you can purchase their excellent coffee in their online shop at texascoffeetraders.com

Booming Riverside Drive comes up short on retail

mapFrom today’s Austin Business Journal:

The rapidly gentrifying East Riverside Drive corridor presents tenants and homebuyers with a plethora of new housing options but the neighborhood has a significant drawback. There isn’t nearly enough retail to serve the mushrooming population.

Commercial real estate broker Jim Young, principal of Longbow Real Estate Group, has been studying the corridor on behalf of several clients and posted a blog on his website about the retail gap and potential investment opportunities.

Based on data culled from ESRI, a research company that is utilized by the Certified Commercial Investment Members professional organization to which Young belongs, the area shown in the accompanying map currently supports $284 million dollars of retail activity annually. The map shows the area within a five-minute drive of 2015 E. Riverside Drive, a retail strip center where Emo’s music venue is located and near the center of the development activity.

But the capacity of retailers within those parameters is only $191 million annually.

“When there is an unmet need, we call it a retail gap because money is leaking out of the trade area,” Young said. That gap is certain to grow, he added.

Hundreds of luxury apartments have opened in the past two years and single-family home communities also have delivered.

Standard Pacific Homes is underway with an infill community dubbed “Park East,” near East Riverside and Montopolis drives.

Young’s client Presidium Group is developing more than 400 apartments at 1600 Pleasant Valley Road.

Nearby, the biggest game changer in recent history will occur when Oracle Corp. builds its 560,000-square-foot campus on the south shore of Lady Bird Lake just west of Pleasant Valley Drive. Some 1,000 employees are expected to be based there, and Oracle purchased an adjacent apartment building with the expectation of providing workforce housing.

Though an HEB Plus Grocery Co. store serves the area, the rest of the retail offerings tend toward fast food restaurants and smaller service providers. The need for more retail development is larger than expected, Young said.

“I’m really surprised by this gap, but East Riverside has changed so dramatically in the last five years both in population and resident income,” he said. “Clearly there’s a new income demographic for the area and it makes sense in hindsight that the retail gap is so large. Someone much smarter than me once said, ‘Retail follows rooftops.'”

Young said he hopes shedding light on the scarcity of retail in an area, which previously was a bulwark of student housing and lower-income households, will lead to more stores and restaurants.

“My hope is that retail and mixed-use developers with creative vision will look deeper at East Riverside Drive as an area to bring some major projects to Austin,” Young said. More information>>>

Huge airport mixed-use development slated for approval

From today’s Austin Business Journal:

Velocity Crossing, a 390-acre mixed-use development near the airport with almost 2 million square feet of office space and hundreds of apartments planned, is expected to receive a zoning change Thursday from Austin City Council that would clear the way for work to begin.

The land is owned by local investors including Karl Koebel and Doug Launius. Austin Business Journal broke the news about the development in a March 2015 cover story about the booming Southeast Austin submarket.

The development will be off State Highway 71 east of Austin-Bergstrom International Airport and have up to 410,000 square feet of retail and restaurant space, 1.5 million square feet of industrial space, 893 apartment units, a 10-screen movie theater, 1,200 hotel rooms and 26 acres of open space, the Austin American-Statesman reports. Construction is expected to wrap up in 2025 but no estimate was given for when it might begin.City Council gave preliminary approval to the zoning change in March.

Southeast Austin has seen increasing development activity lately as investors and homebuyers flock to the open spaces and lower prices outside the urban core and the relatively built-out North Austin submarket. Projects in the area include Brookfield Residential’s Addison and Easton Park master-planned communities plus the forthcoming Pilot Knob.

“It’s really all about transportation access,” Koebel told ABJ last year. “You can get to a job downtown in 15 minutes.”

Additional information>>>

AIBA Armadillo Award Nomination – We need your vote!

ArmadilloPoster_600wDeadline today! Please vote!

Miller Imaging & Digital Solutions has been nominated for an Armadillo Award as a “Community Champion” by the Austin Independent Business Alliance. A community champion is defined as a local business who gives back to the community through personal involvement.

The Armadillo Awards are a way for the AIBA to recognize the amazing local businesses in Austin and their contributions to our community. Voting is open until April 13th and we would appreciate your vote: www.ibuyaustin.com/dillovotes.  Thank you!

 

 

 

 

Four Seasons Austin hotel pricey part of blockbuster Blackstone deal

four-seasons-hotels-and-resFrom today’s Austin Business Journal:

The transaction involves Beijing-based Anbang Insurance Group purchasing the luxury hotel portfolio of Blackstone LP (NYSE: BX). The total amount is estimated $6.5 billion, according to published reports.

The value attributed to Four Seasons Austin is an estimated allocation within the16-property portfolio, which includes the famed Hotel Del Coronado in San Diego and several other Four Season operated hotels around the U.S. The deal is under contract.

Here’s the chronology of events: Strategic Hotels & Resorts purchased the Four Seasons from Lodging Capital Partners and partner Prudential Real Estate Investors in the spring of 2015 for just under $200 million. Then the property quietly changed hands around Christmas when Blackstone purchased Strategic Hotels & Resorts (NYSE: BEE). About 10 days ago, Blackstone unveiled its deal with Anbang.

If Real Capital Analytics data is correct, the Four Seasons Austin will trade at more than $1.2 million per hotel room.

The Four Seasons, which includes 291 rooms and 2.3 acres of land, is located at 98 San Jacinto Blvd. and sits on 2.3 acres of land on the north shore of Lady Bird Lake.  Additional information>>>